Question

Bay Transport Systems (BTS) currently has $30 million in debt outstanding. In addition to 6.5% interest, it plans to repay 5% of the remaining balance each year. If BTS has a marginal corporate tax rate of 40%, and if the interest tax shields have the same risk as the loan, what is the present value of the interest tax shield from the debt?



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  • CreatedAugust 06, 2014
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